Inflation among the world’s top economies has soared to its highest level in 25 years, according to fresh figures released yesterday.
The cost of living scaled to 5.8 per cent in November on an annual basis across countries that make up the Organisations for Economic Co-operation and Development (OECD).
Inflation was driven higher by a global energy crunch propelling energy bills nearly 28 per cent across the OECD area, the hottest rate since 1980.
“Food price inflation in the OECD area picked up strongly to 5.5 per cent in November, compared with 4.6 per cent in October,” the OECD said.
The cost of living in the UK has taken off since the country emerged from the most onerous Covid-19 restrictions last spring, hitting its highest level in over a decade in November at 5.1 per cent.
City experts expect the rate of price increases to potentially rise to seven per cent this April, lifted by the energy watchdog, Ofgem, hiking the cap on energy bills around 50 per cent.
In response to soaring inflation, central banks are anticipated to rein in ultra-stimulative monetary policy to get a hold of the cost of living crisis spiking the world’s richest economies.
The Bank of England is set to flex its inflation fighting muscles this year.
Consultancy Capital Economics expect the Bank to hike rates four times in 2022 to tamp down on the cost of living, taking borrowing costs to 1.25 per cent by the end of the year, the highest level since February 2009.
The Bank lifted rates for the first time in over three years just before the turn of the year.
Across, the pond, US Federal Reserve chief Jerome Powell is expected to lead the charge against prices rising at a near four decade high of 6.8 per cent.
Investment banking giant Goldman Sachs have pencilled in at least four rate hikes this year, taking borrowing costs to one per cent by the end of 2022. New US inflation estimates are released today and are forecast to land at around seven per cent.